Performance appraisals don’t work…

And here are 10 reasons why

We have been discussing performance management ‘systems’ with several clients recently.

What is noticeable is that many firms still rely on an annual/six monthly ‘appraisal’ meeting as the cornerstone of performance management. Through Covid, some firms simply ‘stopped’ doing them altogether (without much impact by all accounts!)

Appraisals

In our experience, fundamental issues with the appraisal process mean that in reality it often achieves very little: neither the individual nor the firm is really benefitting from what can be a very costly and time-consuming process.

Not just the huge investment of time spent in preparing for the meetings, collecting feedback and opinions from others, running the meetings, filling in the forms, setting objectives and deciding on the ratings.

Also, the time spent peer reviewing the ratings, dealing with objections, talking to Human Resources, and thinking about the impact on pay and reward!

10 reasons why performance appraisals add little value:

  1. Things change…very quickly!  This means that objectives set a year ago can lose relevance within a month or so.
  2. Objectives are often ambiguous, inconsistent, and forced.  No consideration is given to the individual – their strengths, ambitions, motivational drivers, and values.  Therefore, can performance really be effectively measured?
  3. Performance is not always linked to reward, progression, and opportunity… there is no real ‘what’s in it for me?’
  4. Often there is no real clarity of the firm’s strategy, so it is difficult for objectives to be aligned with the direction of the firm.  This means that people cannot be clear on the ‘why’ and how they are contributing.
  5. Even if the ‘what’ of the objective has been defined, there is little focus on the ‘how’.  What do I need to do to achieve?  What skills and behaviours do I need to develop?  The ‘how’ needs to be linked to the values and culture.
  6. Competency frameworks are often generic and not business specific and remain static whilst the competency needs of the business change.
  7. The appraisal meetings are often focused on past performance and used as a poor substitute for regular feedback and review meetings.
  8. The rating system is unclear and often subjective; ratings can be based on perception and opinion rather than real metrics and results, and therefore cannot provide an accurate assessment of performance.
  9. There is often little opportunity to sit back and think about the future, potential and talent, and little investment in training and development initiatives, mentoring, coaching and support.
  10. Appraisal forms can be complicated, and the meeting becomes focused on completing the form rather than a valuable discussion about the individual.
  11. I wanted to end this at 10, but…. ssshhh, often the meetings do not even take place.  If both the line manager and the appraisee see no value in the process, then this outcome is not a surprise.

How can we help you?

If you want to drive performance and build resilience and are up to the challenge, then please get in touch and learn how the best firms make the most of feedback and are turning the tables on the ‘old appraisal process’. Find out how we can help you. Email Kate or call us on 0333 7722 061.